Tariff liberalization has a significant bearing on firm performance. Existing theoretical studies predict that input tariff liberalization would raise firm-level markups while final goods tariff liberalization would lower markups. This paper examines whether this two-sided effect holds for Indian manufacturing firms and the role of size and classification. It employs fixed effects models and Heckman's two-step estimation procedure to estimate the impact of input and final goods tariff liberalization under India's Export-Import Policy of 1997–2003 and 2004-09 for large versus Micro, Small and Medium Enterprise (MSME) firms. It confirms the two-sided effect and finds that the input channel is stronger, with large rather than MSME firms experiencing higher markups following input tariff reduction. Further, using a semiparametric Difference-in-Difference model it finds that relaxed size limits in 2006 resulted in higher markups for importing MSMEs. This study highlights the importance of firm size, liberalization channel, and policy framework for firm-level markups.

关税自由化对企业业绩有重大影响。现有的理论研究预测，投入品关税自由化会提高企业层面的加价，而最终产品关税自由化会降低加价。本文研究了这种双面效应是否适用于印度制造企业以及规模和分类的作用。它采用固定效应模型和 Heckman 的两步估计程序来估计印度 1997-2003 年和 2004-09 年进出口政策下投入品和最终商品关税自由化对大型与微型、中小型企业 (MSME) 公司的影响. 它证实了双边效应，并发现投入渠道更强，在投入关税降低后，大型企业而非中小微企业经历了更高的加价。更远，使用半参数差异中的差异模型，它发现 2006 年放宽的规模限制导致进口中小微企业的加价更高。本研究强调了企业规模、自由化渠道和政策框架对企业级加价的重要性。